Sony: Microsoft Wants Blu-Ray Xbox

Microsoft is in talks with Sony about the possibility of adding Blu-ray technology to Xbox 360, reports the Financial Times.

Speaking at a media dinner, Sony Electronics US president Stan Glasgow said the company is in talks with both Microsoft and Apple to add Blu-ray drives to their hardware.

Both companies have been mostly focused on digital delivery of high-definition content, Microsoft with Xbox Live Marketplace and Apple with iTunes.

Notes the Times:

A Blu-ray drive in a 360 would make Microsoft more competitive with the PS3, but it would also mean extra revenues for Sony's electronics division. It would also add further cost to the 360, meaning a premium edition of the console could be necessary. A Blu-ray drive could be incorporated in its top-of-the-range Elite Xbox, or Microsoft could again offer a drive as a plug-in peripheral.

It could certainly happen, and Microsoft probably wouldn't mind paying Sony some money if it meant they could, at least in consumers' minds, take a bit away from what is Sony's biggest competitive advantage with PlayStation 3.

And yet I don't see it happening this generation. I imagine Blu-ray might be a better choice for Xbox 720.